This story was written by Keith Dawson for the Industry Standard's Media Grok email newsletter. It is archived here for informational purposes only because The Standard's site is no more. This material is Copyright 1999-2001 by Standard Media.

Microsoft Stretches .Net Over Great PlainsDec 22 2000 12:00 AM PST

Redmond will take over the business-software company to build up its .Net strategy, though the media are still unsure what that is.

When we feel down here at Media Grok, we go shopping. Microsoft (MSFT), dealing with all sorts of bad stock news this week, appears to have the same policy. The Redmond giant reached into its deep pockets and came up with $1.1 billion in stock to purchase Great Plains Software (GPSI), a developer of applications for small to midsized businesses and a longtime Microsoft partner. Most outlets linked the purchase to Microsoft's somewhat nebulous .Net initiative, which is the elephant that so many blind reporters are trying to describe.

The Financial Times likened .Net to Microsoft's mom-and-pop bCentral service, only for larger businesses. CNET called .Net "Microsoft's software-as-a-service strategy," and Bloomberg said .Net is "akin to a new computer operating system based on the Internet." TechWeb's Barbara Darrow characterized Bill Gates' initiative as "long on complexity and jargon but still short on actual deliverables." In case you missed the point, Darrow included a quote from Dwight Davis of Summit Strategies: ".Net has been little more than a vision to this point and remains one."

CNET, TechWeb, and the Wall Street Journal ran 1,000-word treatments of the acquisition and touched on Microsoft's new potential for channel conflict with Great Plains competitors Sage Software (dossier) and Peachtree, which are also Microsoft partners. CNET and TechWeb explored how Microsoft's new deal relates to its competition with Oracle (ORCL). CNET's Mary Jo Foley reported that Microsoft officials "bristled at any suggestion that Microsoft's Great Plains acquisition is meant to help Microsoft compete with Oracle on the business applications front." Why so touchy? TechWeb quoted the much-in-demand Davis of Summit: "Microsoft denied that Oracle is a factor here, but Oracle, like all enterprise players, is trying to move down-market via the ASP channel."

The Financial Times delved deeper than most into Great Plains' recent financial performance, which earlier this year was less than stellar. The Journal's Rebecca Buckman wrapped up her coverage with insights into the personal relationships that may have greased the merger discussions. Great Plains CEO Doug Burgum knew Microsoft CEO Steve Ballmer at Stanford Business School, and one of the Great Plains board members is a Friend of Bill. - Keith Dawson